What does your “fair share” really mean?
You’ve likely heard this phrase from various Democrats—figures like Bernie Sanders, Elizabeth Warren, and Joe Biden—who insist that the affluent need to “pay their fair share” of taxes.
While there’s some truth to their argument, the idea of “fair” they use differs quite a bit from what many of us at Breitbart Business Digest think.
According to data from 2023, the latest available, the top 1 percent of earners—with an adjusted gross income (AGI) of around $675,000—account for 20.6 percent of wealth and pay 38.4 percent of all federal personal income taxes. This results in an average federal income tax rate of about 26.3 percent.
The top 10 percent of taxpayers, who have a minimum AGI of about $187,000, make up 47.6 percent of total income and contribute over 70 percent of federal income taxes. Their average tax rate is around 21%. In contrast, the top 50 percent receive 88 percent of adjusted gross income and pay 97 percent of federal taxes, translating to an average tax rate of 15.57 percent.
Interestingly, the bottom 50 percent of taxpayers contribute just 12.3 percent of federal income taxes, with an average tax rate of merely 3.7 percent, leading to a total of 3.3 percent of national tax revenue.
So, what does “fairness” mean in this context?
In a strict sense, “fairness” would mean a flat tax rate for all earners. This might encourage individuals to retain more of their earnings, which could motivate them to earn even more. However, I’m not suggesting we adopt that idea right now. I do think the tax code needs reform to prevent the super-wealthy from manipulating it to lower their liabilities. But can we really dismiss their “fair share” arguments?
Today, it looks like Tom Steyer might become California’s next governor, even without much charisma. He claims, “Billionaires and big corporations like me need to pay more taxes because too many Californians are struggling to make ends meet.”
Do you honestly think Mr. Steyer sends extra checks to the IRS beyond what he’s legally required to pay? I doubt it, and only someone not thinking critically would assume otherwise.
So, when will the elites in the Democratic Party step up and pay their fair share?
Did you know that Donald Trump is (likely) benefiting you financially?
This year saw key updates to the U.S. federal tax code, many resulting from the One Big Beautiful Bill Act (OBBBA) and the Working Families Tax Cut.
Here are some noteworthy changes for this tax season:
- The 7-bracket system is set with a top rate of 37%. Without the OBBA, interest rates would have risen and brackets would have tightened.
- Standard deductions for individuals, married couples, and heads of households have significantly increased.
- Tips up to $25,000 are now tax-free.
- Overtime work is exempt from taxation.
- Seniors get an additional $6,000 deduction.
- Qualified U.S.-made vehicles can have an Auto Loan Interest Deduction.
- The SALT deduction limit has risen from $10,000 to $40,000.
- Inheritance tax deductions have been enhanced.
- Beyond the child tax credit, both the adoption credit and medical savings account deduction have also received improvements.
- Many business deductions are now permanent or reinstated, including bonus depreciation on equipment, and there’s a 100 percent bonus depreciation available for eligible investments.
The list continues.
Unless you really benefited from the phased-out clean energy tax credit, you probably saved money this year.
But do Americans realize this? Honestly, it’s hard to say.
With consumer sentiment hitting record lows and hot topics dominating headlines, it seems like people either don’t grasp that President Trump is putting more money back in their pockets, or the ongoing economic challenges are overshadowing any positive news.
This tax season is expected to be the largest refund season in U.S. history, but we’ll have to see if it’s enough to shift the overall tone of the economy.
